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Does Basel Compliance Matter for Bank Performance?

Rym Ayadi (), Sami Ben Naceur (), Barbara Casu and Barry Quinn

No 15/100, IMF Working Papers from International Monetary Fund

Abstract: The global financial crisis underscored the importance of regulation and supervision to a well-functioning banking system that efficiently channels financial resources into investment. In this paper, we contribute to the ongoing policy debate by assessing whether compliance with international regulatory standards and protocols enchances bank operating efficiency. We focus specifically on the adoption of international capital standards and the Basel Core Principles for Effective Bank Supervision (BCP). The relationship between bank efficiency and regulatory compliance is investigated using the (Simar and Wilson 2007) double bootstrapping approach on an international sample of publicly listed banks. Our results indicate that overall BCP compliance, or indeed compliance with any of its individual chapters, has no association with bank efficiency.

Keywords: Bank supervision; Basel Core Principles; Banks; Bank compliance; Bank regulations; BCP, Efficiency, Regulatory Compliance, bank, bank performance, interest, banking, Truncated and Censored Models, Government Policy and Regulation, (search for similar items in EconPapers)
Pages: 41
Date: 2015-05-05
New Economics Papers: this item is included in nep-ban, nep-cba and nep-eff
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Journal Article: Does Basel compliance matter for bank performance? (2016) Downloads
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